- WTI is losing ground, currently trading very close to the 200-day MA support.
- A bearish channel breakout, if confirmed, would create room for a rally to $60.00
WTI oil is feeling the pull of gravity at press time, having failed to close above the falling channel resistance on Tuesday.
As of writing, a barrel of the black gold is changing hands at $56.35. The 200-day moving average support is lined up at $56.27.
On the daily chart, WTI is trapped in a falling channel, as represented by trendlines connecting July 15 and July 31 highs and July 18 and Aug. 7 lows.
A daily close above the upper edge of the falling channel, currently at $57.04 is needed to confirm a bullish breakout. That would allow an extension of the rally from recent lows near $50.50 to $60.00. On the way higher, WTI may face resistance at $58.79 – the bearish lower high created on July 31).
The case for a bullish daily close would weaken if WTI finds acceptance below Tuesday's low of $54.23. That possibility cannot be ruled out as bond markets are screaming global recession.
More importantly, growth in Chinese industrial output fell to its slowest rate in 17 years in July, official data released earlier today showed. As a result, oil and other risk assets will likely remain on the defensive.
- R3 61.27
- R2 59.34
- R1 58.01
- PP 56.08
- S1 54.75
- S2 52.82
- S3 51.49
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